Banking

What is FDIC Insurance?

FDIC insurance protects your deposits up to $250,000 per depositor, per bank. If the bank fails, the government makes you whole. The standard insurance limit is $250,000 per depositor, per FDIC-insured bank, for each account ownership category. FDIC insurance covers checking, savings, money market, and CD accounts, but does not cover investment products such as stocks, bonds, mutual funds, or annuities.

Depositors can maximize coverage by opening accounts under different ownership categories, such as single accounts, joint accounts, or trust accounts. In the event of a bank closure, the FDIC typically pays insured deposits within one business day.

Quick Facts

Standard Limit$250,000 per depositor, per bank, per ownership category

Accounts CoveredChecking, Savings, Money Market, CDs

Excluded ProductsStocks, bonds, mutual funds, annuities, crypto

Funding SourcePremiums paid by insured banks; zero taxpayer funds used

PRACTICAL EXAMPLE

A married couple has a joint savings account with $500,000 and the husband has a single account with $250,000 at the same FDIC-insured bank. In the event of a bank failure, the entire $750,000 is fully insured ($250,000 for the husband's single share and $250,000 each for their joint ownership shares).

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Learn More Key Concepts

Checking AccountA highly liquid transactional deposit account held at a bank, allowing for frequent deposits and immediate withdrawals.

Savings AccountAn interest-bearing deposit account held at a financial institution, designed for accumulating funds with high liquidity.

CD (Certificate of Deposit)A time deposit product offering a fixed interest rate for a specific term, subject to penalties for early withdrawal.

Joint AccountA bank account owned by two or more individuals, each having equal rights to deposit, withdraw, and manage funds.

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